How to Use Excel PMT Function to Calculate Loan Payments

Please SUBSCRIBE:
th-cam.com/users/subscription_...
How to Use the Excel PMT Function
alphabench.com/data/excel-PMT-...
The PMT or Payment function is part of the family of financial functions in Excel. It is useful for calculating a steady stream of payments required to bring any loan balance to zero over a specific period of time. More simply, PMT is a loan payment calculator, and is well suited in Excel to explore different scenarios.
The PMT Function can also be used to evaluate leases, where effectively the loan does not have a 0 balance at the end of its life.
Calculate:
Mortgage loan payments
Auto loan payments
Personal Loan payments

[@Cole-zf6wb]

Thanks for the help sir. You make a difference here.

[@MattMacarty]

Thank you. Glad it helped

[@jordanhollenbaugh2865]

God bless you for this man, you helped me out more than you know 🙏

[@MattMacarty]

Glad it helped

[@reddevil6996]

Thank you very much!!! You just saved me so many headaches!!!

[@MattMacarty]

Glad it helped

[@anikchowdhury9708]

Thank you Sir,it was helpful

[@MattMacarty]

Gad it helped

[@str223]

Thank you Sir.

[@MattMacarty]

Glad it helped

[@stellajubalte3157]

Thank you very much!!

[@MattMacarty]

Glad it helped

[@anthonycoad]

3:35 thanks a lot for that part.

[@MattMacarty]

Glad it helped

[@sgault973]

Thank you!

[@MattMacarty]

Glad it helped

[@probablyonahonda]

You are awesome

[@MattMacarty]

Glad it helped

[@Nottheburger]

This is great but how would I add an additional cost such as home owners insurance and property taxes?

[@MattMacarty]

I would just add them separately below the base payment, so add a row for each.

[@rafiqueahmed9152]

Assalamu O Alaikum WR WB
Thanks a lot for your kindness and bounty too much to
Macha Allah
AAPANA khayal RUKHEIN PLZ-R- salat and khas Dua's me yad RUKHEIN plz Insah Allah amiin plz
Zajak Allah khairan

[@MattMacarty]

Glad it helped

[@sharondavictoria3469]

What if you arent given an interest rate ?

[@MattMacarty]

Hmm could be a loan shark I guess ;) we can solve for one variable if given the others. So you can solve for interest rate as long as you are given the payment, term and amount borrowed. In Excel the easiest way would be to use goal seek.

[@stevenleskin7006]

How would you modify the PMT calculation if an installment loan term was consistently less than 12 months?

[@MattMacarty]

So if you pay or get paid quarterly it’s rate/4. Just divide the rate by number of payments in a year.

[@stevenleskin7006]

@@MattMacarty Thank you for your response. My question was not clear. Suppose the installment contract only last six months, with one payment every month? I tried rate*.5 for example, for half a year, but got incorrect results. Thank you, again, for your help.

[@MattMacarty]

@@stevenleskin7006 Depends on how the interest is quoted. If it's annualized, then 0.5 x should be right, then divide by 6 for each PMT

[@Adrian-cn5rk]

what if when you copy and paste the figure to a different year or to a different interest rate and the answer returned is "#NUM!"

[@MattMacarty]

It sounds like when you copied the formula to a new location one or more of the cell references became invalid. Check your formula carefully to make sure it is pointing at the correct cells in your spreadsheet.

[@Adrian-cn5rk]

@@MattMacarty oh okay thank you very much!

[@kiarabromfield6541]

Why do divide it by 12

[@MattMacarty]

Interest is always presented as an annualized number, but you pay on the loan monthly. So each month 1/12 of the annual interest is paid.

[@kiarabromfield6541]

@@MattMacarty oh ok thx